Pasting $\LaTeX$ into a Mathematica notebook

I'm prompted by Mathematica when pasting (using 8.0.4) so I don't have this issue. The following seems to do the trick though..

ToExpression["\\frac{1}{2}", TeXForm]

I would expect others might have more illuminating responses to this.

EDIT:

The prompt I referred to is controlled via GlobalOptions > MessageOptions > TeXPasteWarning in the Options Inspector which can be found under Edit > Preferences > Advanced. If this is set to False you won't get prompted as to how you would like to paste the input.

I find pasting $\frac{1}{2}$ works but pasting \frac{1}{2} does not. So the dollar signs seems necessary, although I realize that doesn't fix your problem it may be a useful hint to other users.